Healthcare Realty Trust Reports Normalized FFO Of $0.32 Per Share For The First Quarter

NASHVILLE, Tenn., May 1, 2013 /PRNewswire/ -- Healthcare Realty Trust Incorporated (NYSE: HR) today announced results for the first quarter ended March 31, 2013. Normalized FFO for the three months ended March 31, 2013 totaled $0.32 per diluted common share. Normalized FAD for the three months ended March 31, 2013 totaled $0.34 per diluted common share.

Salient highlights include:

Year-over-year NOI for the same-store portfolio increased 2.5% in the first quarter.

The Company renewed 72 leases in its same-store portfolio totaling 270,168 square feet, with a retention rate of 84.2%.

The twelve stabilizing properties ("SIP") were 65% leased at the end of the first quarter, with occupancy increasing to 45%.

NOI for the SIP properties reached approximately $1.3 million per quarter.

Since the beginning of the first quarter, the Company acquired two facilities for a total purchase price of $32.5 million. The buildings total approximately 95,000 square feet and are both 100% occupied.

The Company raised $39.7 million in the first quarter through its at-the-market equity program to fund recent acquisitions.

The Company issued $250 million of unsecured senior notes due in April 2023 with a coupon rate of 3.75%. In conjunction with the issuance of these notes, the Company redeemed its 5.125% 2014 unsecured senior notes in April 2013.

The Company extended the maturity date to April 2017 and lowered its borrowing cost under its unsecured $700 million revolving credit facility.

A dividend of $0.30 per share was declared for the first quarter of 2013, which is 88.2% of normalized FAD.

For the three months ended March 31, 2013, year-over-year revenues grew by $6.4 million to $82.6 million, income from continuing operations totaled $2.1 million, and the Company recognized a net loss, including $3.6 million in impairment charges, totaling $1.0 million.

Healthcare Realty Trust is a real estate investment trust that integrates owning, managing, financing and developing income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. The Company had investments of approximately $3.0 billion in 205 real estate properties and mortgages as of March 31, 2013. The Company's 200 owned real estate properties are located in 28 states and total approximately 13.5 million square feet. The Company provides property management services to approximately 10.1 million square feet nationwide.

Additional information regarding the Company, including this quarter's operations, can be found at www.healthcarerealty.com. Please contact the Company at 615.269.8175 to request a printed copy of this information.

In addition to the historical information contained within, the matters discussed in this press release may contain forward-looking statements that involve risks and uncertainties. These risks are discussed in filings with the Securities and Exchange Commission by Healthcare Realty Trust, including its Annual Report on Form 10-K for the year ended December 31, 2012 under the heading "Risk Factors," and as updated in its Quarterly Reports on Form 10-Q filed thereafter. Forward-looking statements represent the Company's judgment as of the date of this release. The Company disclaims any obligation to update forward-looking statements.

(1) The Condensed Consolidated Balance Sheets do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

HEALTHCARE REALTY TRUST INCORPORATED

Condensed Consolidated Statements of Operations(1)

(amounts in thousands, except for share data)

(Unaudited)

Three Months Ended

March 31,

2013

2012

Revenues

Rental income

$78,191

$72,099

Mortgage interest

2,937

2,292

Other operating

1,456

1,774

82,584

76,165

Expenses

Property operating

29,826

28,285

General and administrative

6,541

5,261

Depreciation

21,852

20,479

Amortization

2,689

2,522

Bad debt, net of recoveries

(12)

(41)

60,896

56,506

Other Income (Expense)

Interest expense

(19,795)

(18,379)

Interest and other income, net

232

216

(19,563)

(18,163)

Income From Continuing Operations

2,125

1,496

Discontinued Operations

Income from discontinued operations

487

2,380

Impairments

(3,630)

(4,170)

Gain on sales of real estate properties

—

3,428

Income (Loss) From Discontinued Operations

(3,143)

1,638

Net Income (Loss)

(1,018)

3,134

Less: Net loss attributable to noncontrolling interests

19

—

Net Income (Loss) Attributable To Common Stockholders

($999)

$3,134

Basic Earnings (Loss) Per Common Share:

Income from continuing operations

$0.02

$0.02

Discontinued operations

(0.03)

0.02

Net income (loss) attributable to common stockholders

($0.01)

$0.04

Diluted Earnings (Loss) Per Common Share:

Income from continuing operations

$0.02

$0.02

Discontinued operations

(0.03)

0.02

Net income (loss) attributable to common stockholders

($0.01)

$0.04

Weighted Average Common Shares Outstanding—Basic

86,894

76,427

Weighted Average Common Shares Outstanding—Diluted

88,382

77,641

(1) The Condensed Consolidated Statements of Operations do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

HEALTHCARE REALTY TRUST INCORPORATED

Reconciliation of FFO and Normalized FFO(1)(2)

(amounts in thousands, except per share data)

(Unaudited)

Three Months Ended

March 31,

2013

2012

Net Income (Loss) Attributable to Common Stockholders

($999)

$3,134

Gain on sales of real estate properties

—

(3,428)

Impairments

3,630

4,170

Real estate depreciation and amortization

23,958

23,428

Total adjustments

27,588

24,170

Funds From Operations

$26,589

$27,304

Write off of deferred financing costs upon amendment of line of credit facility

252

—

Acquisition costs

219

109

Interest incurred related to the timing of issuance/redemption of senior notes

188

—

Severance costs included in general and administrative expenses

609

—

Termination fee received upon disposal of a real estate asset

—

(1,500)

Normalized Funds From Operations

$27,857

$25,913

Funds from Operations per Common Share—Diluted

$0.30

$0.35

Normalized Funds From Operations Per Common Share—Diluted

$0.32

$0.33

Weighted Average Common Shares Outstanding—Diluted

88,382

77,641

(1) Funds from operations ("FFO") and FFO per share are operating performance measures adopted by the National Association of Real Estate Investment Trusts, Inc. ("NAREIT"). NAREIT defines FFO as the most commonly accepted and reported measure of a REIT's operating performance equal to "net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures."

(2) FFO and Funds Available For Distribution ("FAD") do not represent cash generated from operating activities determined in accordance with accounting principles generally accepted in the United States of America and are not necessarily indicative of cash available to fund cash needs. FFO and FAD should not be considered alternatives to net income attributable to common stockholders as indicators of the Company's operating performance or as alternatives to cash flow as measures of liquidity.

HEALTHCARE REALTY TRUST INCORPORATED

Reconciliation of FAD and Normalized FAD(1)

(amounts in thousands, except per share data)

(Unaudited)

Three Months Ended

March 31,

2013

2012

Net Income (Loss) Attributable to Common Stockholders

($999)

$3,134

Gain on sales of real estate properties

—

(3,428)

Impairments

3,630

4,170

Depreciation and amortization - real estate

23,983

23,428

Depreciation and amortization - other

1,885

1,304

Provision for bad debt, net

(12)

(42)

Straight-line rent receivable

(1,680)

(1,900)

Straight-line rent liability

102

90

Stock-based compensation

1,848

932

Provision for deferred post-retirement benefits

217

266

Total non-cash items included in cash flows from operating activities

29,973

24,820

Funds Available For Distribution

$28,974

$27,954

Write off of deferred financing costs upon renewal of line of credit facility

252

—

Acquisition costs

219

109

Interest incurred related to the timing of issuance/redemption of senior notes

188

—

Severance costs included in general and administrative expenses excluding stock-based compensation

218

—

Termination fee received upon disposal of a real estate asset

—

(1,500)

Normalized Funds Available For Distribution

$29,851

$26,563

Funds Available For Distribution Per Common Share—Diluted

$0.33

$0.36

Normalized Funds Available For Distribution Per Common Share—Diluted

$0.34

$0.34

Weighted Average Common Shares Outstanding—Diluted

88,382

77,641

(1) FFO and Funds Available For Distribution ("FAD") do not represent cash generated from operating activities determined in accordance with accounting principles generally accepted in the United States of America and are not necessarily indicative of cash available to fund cash needs. FFO and FAD should not be considered alternatives to net income attributable to common stockholders as indicators of the Company's operating performance or as alternatives to cash flow as measures of liquidity.